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In 1997-1998, East Asia was hit by its most severe financial crisis in decades. It caused significant short-term collateral damage to the Chinese economy but not enough to knock it off its high-growth trajectory. In 1997-1998, Beijing's decision to keep its exchange rate pegged to the US dollar, despite sharp falls in the exchange rates of the crisis-hit countries and China's continued economic buoyancy, did much to burnish the PRC's East Asian leadership credentials and damage those of the US.

Fast forward eleven years and we can see the same thing happening today at the global level. The global economy is suffering it worst financial crisis in living memory. China's export machine has been hammered but its overall economy continues to forge ahead. In 2008-2009, Beijing's massive fiscal stimulus package, very aggressive state bank lending, and China's continued economic buoyancy is doing much to burnish the PRC's global leadership credentials and damage those of the US.

In 1997-1998, Beijing used its improved leadership standing in East Asia to push for new East Asian regional groupings like the ASEAN-3 process (that excludes Australia) and to start negotiating a wide range of bilateral swap agreements and trade deals with ASEAN countries that will bind Southeast Asia more closely and more predictably to the PRC.

Today, Beijing, with its own vulnerability to the US dollar front of mind, looks like it is trying to do the same thing globally. The two clichés — that history repeats itself and that the Chinese character for crisis combines the characters for danger and opportunity — still do sometimes prove their worth.